Hindustan Unilever Ltd to pay Rs 27 lakh for misleading customers

Delhi State Consumer Commission has imposed a penalty of Rs 27 lakh on HUL for "playing a fraud" on its customers by floating a "misleading and fraudulent advertisement" on its product 'Surf Excel'.PTI | June 28, 2016, 08:15 IST

NEW DELHI: Delhi State Consumer Commission has imposed a penalty of Rs 27 lakh on Hindustan Unilever Ltd for "playing a fraud" on its customers by floating a "misleading and fraudulent advertisement" on its product 'Surf Excel'.

A bench of Delhi State Consumer Disputes Redressal Commission asked the company to deposit the money while rejecting its appeal against an order passed by a district consumer forum here which had asked it to pay the prize money to one of the winners of a scheme.

While upholding the forum's order to give the prize money to Delhi resident Pramod Gupta, the commission also imposed a cost of Rs 27 lakh on the firm and noted that a large number of consumers "were kept in dark about the terms and conditions of the contract".

"I am left with no option but to hold that the Opposite Party (firm) in the garb of becoming a philanthropist has befooled a large number of its customers in the country...

"In the circumstances, I am of the considered opinion that the Opposite Party (OP) has played a fraud upon its customers by floating a misleading and fraudulent advertisement. It promoted its sales at the cost of causing harassment and mental agony to the customers," the commission's judicial member N P Kaushik said, while dismissing the company's appeal with a cost of Rs two lakh.

The bench further said, "As a large number of customers have suffered at the hands of the OP, it is burdened with costs of Rs 25 lakh which is to be deposited in Consumer Welfare Fund of State maintained by this Commission for causing inconvenience, harassment, mental agony to those customers who are not easily identifiable."

In a complaint filed before forum, Gupta had claimed that for promoting the sales of 'Surf Excel', a scheme was introduced by the company in which a scholarship of Rs five lakh was offered to the children of a person finding piece of cloth (swatch) inside the detergent packet and bearing the score of 10/10.

Gupta, who was one such winner, had contacted the firm and submitted the swatch. However, he was later told by the firm that his claim was repudiated. Thereafter, Gupta approached the district forum, the complaint said.

In its reply before the forum, the company claimed that Gupta had furnished the swatch with 10/10 score, but a "unique code" was missing.

The bench noted that several customers sent the swatches with 10/10 score, but the without unique code.

"After finding the swatch with 10/10 score in the packet, they were enthused to get the prize. They never knew that a further rider of possessing a unique code is put by the OP," it noted.

"Why did the OP play this trick with customers? Obviously it was to make them purchase more and more packets to find a swatch with 10/10 score. Only four swatches were the qualifying ones, out of which only two, as stated by the OP, got the prize. From a large number of litigations all over the country, it is clear that customers with 10/10 scores not only approached the OP by way of correspondence or visited its office in Mumbai but also had to fight long drawn legal battles.

"What was their fault? None. They were the victims of the trick played by the Opposite Party. They were kept in dark about the terms and conditions of the contract. Such a large number of purchasers of detergent have been put to harassment, inconvenience, frustration, sadness, mental agony and anguish. It is not the case of the OP that the complainant in the present case had fabricated the swatch," the commission said.

It also said that "it is not understandable as to why OP did not disclose to customers that a unique code was being used by it, for weeding out the false claimants" and added that "transparency must be observed by contracting parties on terms and conditions of agreement."

The order also said that the firm had taken contradictory stand in its written submission as it admitted in it that the said swatch simply did not have the unique code.